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Document Preview Agreement and Plan of Merger |
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Title: |
Agreement and Plan of Merger |
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Entities: |
Bryn Mawr Bank Corp.; DNB Financial Corp.; Farnsworth Bancorp, Inc.; Raymond James & Associates, Inc.; TF Financial Corp. |
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Date: |
2006 |
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Size: |
Preview shows 24KB of 225KB total |
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Price: |
$64 |
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ID: |
#2172678 |
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Start of Preview |
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AGREEMENT AND PLAN OF MERGER
By and Among
STERLING BANKS, INC.,
STERLING BANK
And
FARNSWORTH BANCORP, INC.
Dated as of June 23, 2006
{PAGE}
{TABLE}
{CAPTION}
{S} {C}
ARTICLE 1
THE MERGER........................................................................................................2
Section 1.1 Consummation of Merger; Closing Date............................................................2
Section 1.2 Effect of Merger................................................................................3
Section 1.3 Further Assurances..............................................................................3
Section 1.4 Directors and Officers..........................................................................3
ARTICLE 2
CONVERSION OF CONSTITUENTS' CAPITAL SHARES........................................................................3
Section 2.1 Manner of Conversion of Farnsworth Shares ......................................................3
Section 2.2 Election and Proration Procedures...............................................................4
Section 2.3 Farnsworth Stock Options........................................................................7
Section 2.4 Fractional Shares...............................................................................7
Section 2.5 Effectuating Conversion.........................................................................7
Section 2.6 Determination of Alternative Structures; Holding Company Reorganization.........................9
Section 2.7 Laws of Escheat.................................................................................9
Section 2.8 Dissenting Shares...............................................................................9
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF FARNSWORTH.....................................................................10
Section 3.1 Corporate Organization.........................................................................10
Section 3.2 Capitalization.................................................................................11
Section 3.3 Financial Statements; Filings..................................................................12
Section 3.4 Loan Portfolio; Reserves.......................................................................12
Section 3.5 Certain Loans and Related Matters..............................................................13
Section 3.6 Authority; No Violation........................................................................13
Section 3.7 Consents and Approvals.........................................................................14
Section 3.8 Broker's Fees..................................................................................14
Section 3.9 Absence of Certain Changes or Events...........................................................14
Section 3.10 Legal Proceedings; Etc.........................................................................14
Section 3.11 Taxes and Tax Returns..........................................................................15
Section 3.12 Employee Benefit Plans.........................................................................16
Section 3.13 Title and Related Matters......................................................................18
Section 3.14 Real Estate....................................................................................19
Section 3.15 Environmental Matters..........................................................................20
Section 3.16 Commitments and Contracts......................................................................21
Section 3.17 Regulatory Matters.............................................................................22
Section 3.18 Registration Obligations.......................................................................23
Section 3.19 Antitakeover Provisions........................................................................23
Section 3.20 Insurance......................................................................................23
Section 3.21 Labor..........................................................................................23
Section 3.22 Compliance with Laws...........................................................................24
Section 3.23 Transactions with Management...................................................................25
Section 3.24 Derivative Contracts...........................................................................25
Section 3.25 Deposits.......................................................................................25
Section 3.26 Accounting Controls; Disclosure Controls.......................................................25
Section 3.27 Deposit Insurance..............................................................................26
{/TABLE}
i
{PAGE}
{TABLE}
{CAPTION}
{S} {C}
Section 3.28 Intellectual Property..........................................................................26
Section 3.29 Absence of Undisclosed Liabilities.............................................................26
Section 3.30 Exchange Act Reports...........................................................................27
Section 3.31 Fairness Opinion...............................................................................27
Section 3.32 Investment Securities..........................................................................27
Section 3.33 Proxy Materials................................................................................27
Section 3.34 Untrue Statements and Omissions
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF STERLING AND STERLING BANK.....................................................28
Section 4.1 Organization and Related Matters of Sterling and Sterling Bank.................................28
Section 4.2 Capitalization.................................................................................29
Section 4.3 Authorization..................................................................................29
Section 4.4 Financial Statements...........................................................................30
Section 4.5 Consents and Approvals.........................................................................30
Section 4.6 Proxy Materials................................................................................30
Section 4.7 Regulatory Matters.............................................................................31
Section 4.8 Untrue Statements and Omissions................................................................31
Section 4.9 Absence of Certain Changes or Events...........................................................31
Section 4.10 Legal Proceedings; Etc.........................................................................31
Section 4.11 Compliance with Laws...........................................................................31
Section 4.12 Antitakeover Provisions........................................................................32
Section 4.13 Accounting Controls; Disclosure Controls. .....................................................33
Section 4.14 Deposit Insurance..............................................................................33
Section 4.15 Absence of Undisclosed Liability...............................................................33
Section 4.16 Exchange Act Reports...........................................................................33
Section 4.17 Fairness Opinion...............................................................................34
ARTICLE 5
COVENANTS AND AGREEMENTS.........................................................................................34
Section 5.1 Conduct of the Business of Farnsworth, Sterling and Sterling Bank..............................34
Section 5.2 Current Information............................................................................37
Section 5.3 Access to Properties; Personnel and Records....................................................37
Section 5.4 Approvals of Shareholders......................................................................38
Section 5.5 No Other Bids..................................................................................39
Section 5.6 Notice of Deadlines............................................................................39
Section 5.7 Maintenance of Properties......................................................................39
Section 5.8 Conforming Accounting and Reserve Policies.....................................................39
Section 5.9 Bank Merger Agreement..........................................................................40
Section 5.10 Holding Company Reorganization.................................................................40
{/TABLE}
ii
{PAGE}
{TABLE}
{CAPTION}
{S} {C}
ARTICLE 6
ADDITIONAL COVENANTS AND AGREEMENTS..............................................................................41
Section 6.1 Best Efforts; Cooperation......................................................................41
Section 6.2 Regulatory Matters.............................................................................41
Section 6.3 Employment and Employee Benefits Matters.......................................................41
Section 6.4 Indemnification................................................................................43
Section 6.5 Registration Statement. .......................................................................44
Section 6.6 Press Releases.................................................................................45
Section 6.7 Nasdaq Listing.................................................................................45
Section 6.8 Board of Directors of Sterling and Sterling Bank...............................................45
Section 6.9 Notification of Certain Matters................................................................45
ARTICLE 7
MUTUAL CONDITIONS TO CLOSING.....................................................................................46
Section 7.1 Shareholder Approvals..........................................................................46
Section 7.2 Regulatory Approvals...........................................................................46
Section 7.3 Litigation.....................................................................................45
Section 7.4 Joint Proxy Statement/Prospectus and Registration Statement....................................46
Section 7.5 Tax Opinion....................................................................................46
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF STERLING AND STERLING BANK......................................................47
Section 8.1 Representations and Warranties.................................................................47
Section 8.2 Performance of Obligations.....................................................................47
Section 8.3 Certificate Representing Satisfaction of Conditions............................................47
Section 8.4 Consents Under Agreements......................................................................47
Section 8.5 Material Condition.............................................................................47
ARTICLE 9
CONDITIONS TO OBLIGATIONS OF FARNSWORTH..........................................................................48
Section 9.1 Representations and Warranties.................................................................48
Section 9.2 Performance of Obligations.....................................................................48
Section 9.3 Certificate Representing Satisfaction of Conditions............................................48
Section 9.4 Consents Under Agreements......................................................................48
Section 9.5 Sterling Shares................................................................................49
ARTICLE 10
TERMINATION, WAIVER AND AMENDMENT................................................................................49
Section 10.1 Termination.................................................................................49
Section 10.2 Effect of Termination; Termination Fee......................................................53
Section 10.3 Amendments..................................................................................53
Section 10.4 Waivers.....................................................................................53
Section 10.5 Non-Survival of Representations, Warranties and Covenants...................................53
{/TABLE}
iii
{PAGE}
{TABLE}
{CAPTION}
{S} {C}
ARTICLE 11
MISCELLANEOUS....................................................................................................54
Section 11.1 Definitions.................................................................................54
Section 11.2 Entire Agreement............................................................................56
Section 11.3 Notices.....................................................................................57
Section 11.4 Severability................................................................................57
Section 11.5 Costs and Expenses..........................................................................58
Section 11.6 Captions....................................................................................58
Section 11.7 Counterparts................................................................................58
Section 11.8 Persons Bound; No Assignment................................................................58
Section 11.9 Governing Law...............................................................................58
Section 11.10 Exhibits and Schedules......................................................................58
Section 11.11 Waiver......................................................................................58
Section 11.12 Construction of Terms.......................................................................59
{/TABLE}
iv
{PAGE}
AGREEMENT AND PLAN OF MERGER
By and Among
STERLING BANKS, INC.
STERLING BANK
AND
FARNSWORTH BANCORP, INC.
This AGREEMENT AND PLAN OF MERGER, dated as of the 23rd day of June,
2006 (this "Agreement"), by and among STERLING BANKS, INC., a New Jersey
corporation ("Sterling"), Sterling Bank, a New Jersey chartered commercial bank
("Sterling Bank") and FARNSWORTH BANCORP, INC., a New Jersey corporation
("Farnsworth") collectively, (the "Parties").
WITNESSETH THAT:
WHEREAS, the Boards of Directors of Sterling, Sterling Bank and
Farnsworth deem it in the best interests of Sterling, Sterling Bank and
Farnsworth, respectively, and of their respective shareholders, that Sterling
acquire all of the outstanding stock of Farnsworth by means of a merger of
Farnsworth with and into Sterling (the "Merger") pursuant to this Agreement in a
transaction that qualifies as a reorganization pursuant to Section 368 of the
Internal Revenue Code of 1986 (as amended, the "Code");
WHEREAS, Sterling was recently formed for the purpose of becoming the
holding company for Sterling Bank upon consummation of the reorganization of
Sterling Bank into the holding company form of ownership pursuant to a Plan of
Acquisition under the New Jersey Banking Act (the "Holding Company
Reorganization") and it is anticipated that such Holding Company Reorganization
will be consummated prior to the Merger;
WHEREAS, Farnsworth owns all of the issued and outstanding capital
stock of Peoples Savings Bank, a federally chartered savings bank ("Peoples")
and, upon consummation of the Holding Company Reorganization, Sterling will own
all of the issued and outstanding capital stock of Sterling Bank, and it is
contemplated that, subsequent to the Merger and pursuant to the terms of a
certain Agreement and Plan of Bank Merger (the "Bank Merger Agreement"), Peoples
will be merged with and into Sterling Bank (the "Bank Merger");
WHEREAS, as an inducement and condition to Sterling's and Sterling Bank
entering into this Agreement, each of the directors and executive officers of
Farnsworth have entered into Affiliate and Voting Agreements with Sterling and
Sterling Bank pursuant to which they have agreed to vote their Farnsworth Shares
(as defined herein) in favor of approval of the Agreement.
WHEREAS, as an inducement and condition to Farnsworth's entering into
this Agreement, each of the directors and executive officers of Sterling and
Sterling Bank have entered into Voting Agreements with Farnsworth pursuant to
which they have agreed to vote their Sterling Bank Shares (as defined herein) in
favor of approval of the Holding Company Reorganization and the Agreement.
{PAGE}
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, representations, warranties and agreements herein contained and
intending to be legally bound hereby, the Parties agree that Farnsworth will be
merged with and into Sterling and that the terms and conditions of the Merger,
the mode of carrying the Merger into effect, including the manner of converting
the shares of common stock of Farnsworth, $0.10 par value per share, into shares
of common stock of Sterling, $2.00 par value per share (the "Sterling Shares")
or if the Holding Company Reorganization has not occurred into shares of
Sterling Bank, $2.00 par value per share (the "Sterling Bank Shares) and/or
cash, and as further described herein, shall be as hereinafter set forth.
ARTICLE 1
THE MERGER
Section 1.1 Consummation of Merger; Closing Date.
(a) Subject to the provisions hereof, including, without limitation,
Section 2.6 hereof respecting the possible restructuring of the transaction
under certain circumstances, Farnsworth shall be merged with and into Sterling
(which has heretofore and shall hereinafter be referred to as the "Merger")
pursuant to the laws of the State of New Jersey, and Sterling shall be the
surviving corporation (sometimes hereinafter referred to as "Surviving
Corporation").
(b) The Merger shall become effective on the date and at the time
specified in the certificate of merger to be filed with the New Jersey Secretary
of State pursuant to the New Jersey Business Corporation Act ("NJBCA") (such
time is hereinafter referred to as the "Effective Time"). Subject to the terms
and conditions hereof, unless otherwise agreed upon by Sterling and Farnsworth,
the Effective Time shall occur on the tenth (10th) business day following the
later to occur of (i) the effective date (including expiration of any applicable
waiting period) of the last required Consent (as defined herein) of any
Regulatory Authority (as defined herein) having authority over the transactions
contemplated under this Agreement and the satisfaction or waiver of all of the
other terms and conditions of this Agreement (other than the filing of a
Certificate of Merger) and (ii) the date on which the shareholders of Farnsworth
and Sterling Bank approve the transactions contemplated by this Agreement, or
such other time as the Parties may agree.
(c) The closing of the Merger (the "Closing") shall take place at the
offices of Dilworth Paxson LLP, 1735 Market Street, 3200 Mellon Bank Center,
Philadelphia, Pennsylvania 19103, at 10:00 a.m. local time on the day that the
Effective Time occurs, or such other date, time and place as the Parties hereto
may agree (the "Closing Date"). Subject to the provisions of this Agreement, at
the Closing there shall be delivered to each of the Parties hereto the opinions,
certificates and other documents and instruments required to be so delivered
pursuant to this Agreement.
2
{PAGE}
Section 1.2 Effect of Merger. At the Effective Time, Farnsworth shall
be merged with and into Sterling and the separate existence of Farnsworth shall
cease. The Certificate of Incorporation and Bylaws of Sterling, as in effect on
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